DJ Polymetal: Ore Reserves, Mineral Resources and Exploration update as at 1 January 2022
Polymetal International plc (POLY) Polymetal: Ore Reserves, Mineral Resources and Exploration update as at 1 January 2022 01-March-2022 / 10:00 MSK Dissemination of a Regulatory Announcement, transmitted by EQS Group. The issuer is solely responsible for the content of this announcement.
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Release time IMMEDIATE LSE, MOEX, AIX: POLY / ADR: AUCOY Date 01 March 2022 Polymetal International plc
Ore Reserves, Mineral Resources and Exploration update as at 1 January 2022
Polymetal announces its Ore Reserves and Mineral Resources as at 1 January 2022 in accordance with the JORC Code (2012) and exploration update for the year ended 31 December 2021.
"In 2021, exploration success and technical innovation have more than offset depletion and resulted in a significant ore reserve increase", said Vitaly Nesis, Group CEO of Polymetal."Our steady investment in exploration also secured the expansion of mineral resources which ensures Polymetal's consistent long-term growth".
2021 HIGHLIGHTS
-- In 2021, Group Ore Reserve increased by 7% or 2 Moz y-o-y to 30 Moz of gold equivalent (GE)[1] on theback of successful near-mine exploration at Nezhda, Veduga, and Kutyn (Albazino hub), as well as initial reserveestimates at Elevator (Varvara hub), Saum (Voro hub) and Nevenrekan (Omolon hub). As a result, GE Ore Reserves pershare grew by 7%.
-- The reserve replacement ratio amounted to 208%[2]. Average mine life increased by 11% y-o-y to reach 16years.
-- The average grade in Ore Reserves was down 7% y-o-y and stood at 3.5 g/t of GE primarily due tohigh-grade reserve depletion at Kyzyl, Omolon and Mayskoye. Polymetal GE grades continue to be one of the highestwithin the sector globally.
-- Share of Ore Reserves for open-pit mining stood at 53%, similar to the previous year. Share of refractoryreserves amounted to 71%, stable y-o-y. Share of silver in Ore Reserves decreased by 2 percentage points to 9%.
-- Mineral Resources (additional to Ore Reserves) grew by 13% or 2.8 Moz y-o-y to 24.6 Moz of GE due toinitial resource estimates at Novopet (JV with Rosgeo), Voro hub (Pavlov) as well as resource increases atAlbazino, Mayskoye and Nezhda.
-- At the end of 2021, the Board of Directors made the decision to align price assumptions used for OreReserve and Mineral Resource estimates with short-term price assumptions used for current mine planning. Thisapproach ensures full consistency of long and short-term plans as well as improves transparency of productionindicators. Starting from this report, Polymetal uses USUSD 1,500/oz for gold and USUSD 20/oz for silver in both cases. Ore Reserves and Mineral Resources summary (1), (2)
1 January 2022 1 January 2021 Change Ore Reserves (Proved+Probable), GE Moz 29.9 27.9 +7% Gold, Moz 27.1 24.9 +9% Silver, Moz 240.2 246.3 -2% Average reserve grade, g/t 3.5 3.8 -7% Ore Reserves per share, GE oz/per share 0.063 0.059 +7% Mineral Resources (Measured+Indicated+Inferred), GE Moz 24.6 21.8 +13% Gold, Moz 22.3 19.5 +15% Silver, Moz 195.7 191.9 +2% Average resource grade, g/t 4.1 4.7 -11% 1. Ore Reserves and Mineral Resources from continuing operations. Base metal are not included in GEcalculation as they are insignificant. Ore Reserves of rare earths metals are given separately and not included inGE calculation. 2. Mineral Resources are additional to Ore Reserves. Mineral Resources of platinum group metals and rareearth metals are given separately and are not included in the calculation of GE. Discrepancies in calculations aredue to rounding.
2022 OUTLOOK
In 2022, Polymetal will continue to invest in both near-mine and greenfield exploration projects.
The key objectives are:
-- Complete an updated Ore Reserve estimate at Veduga.
-- Prepare an initial Ore Reserve estimate at Talgiy (Albazino).
-- Prepare an initial Mineral Resource estimate at Doroninskaya area (Dukat).
Ore Reserves and Mineral Resources structure by metal as at 1 January 2022
Ore Reserves Mineral Resources Gold 91% 91% Silver 9% 9% Total 100% 100%
Ore Reserves reconciliation, GE Moz (1)
Ore Reserves, Depletion Revaluation Initial Ore Reserve Change of GE conversion Ore Reserves, 01.01.2021 estimate ratio 01.01.2022 27.9 -1.8 +2.9 +0.9 +0.0 29.9 1. Discrepancies in calculations are due to rounding.
Ore Reserves and Mineral Resources as at 1 January 2022 (1)
Tonnage Grade Content
Mt GE, g/t GE, Moz
Ore Reserves
Proved 78.6 2.6 6.7
Probable 188.1 3.8 23.2
Proved+Probable 266.7 3.5 29.9
Mineral Resources
Measured 20.7 3.6 2.4
Indicated 60.5 3.4 6.7
Measured+Indicated 81.2 3.5 9.0
Inferred 104.0 4.7 15.6
Measured+Indicated+Inferred 185.1 4.1 24.6 1. Mineral Resources and Ore Reserves in accordance with the JORC Code (2012). Mineral Resources areadditional to Ore Reserves. Detailed tables for Mineral Resources and Ore Reserves with a breakdown by deposits andmetals are given below. Mineral Resources of platinum group metals and rare earth metals are given separately andare not included in the calculation of the gold equivalent. Discrepancies in calculations are due to rounding.
Exploration areas and volumes (mine site exploration excluded) (1)
Drilling, km
2021 2020
Brownfield
Kyzyl 3.5 2.4
Albazino hub 59.0 51.7
Omolon hub 29.8 8.0
Varvara hub 34.7 13.7
Dukat hub 45.0 3.3
Svetloye 27.8 3.6
Voro hub 34.0 12.6
Mayskoye 3.6 -
Subtotal 237.4 95.2
Greenfield
Yakutia 27.2 12.7
Nezhda 9.5 4.9
Prognoz 17.7 7.8
Kutyn 28.6 25.5
Veduga 10.6 27.0
Bashkiria 6.5 -
Urals - 5.1
Karelia 14.5 -
Viksha - 22.2
Others - 0.7
Subtotal 87.3 93.3
Total 324.7 188.5
Joint ventures with juniors 71.3 -
Total including JVs 396.0 188.5 1. Discrepancies in calculations are due to rounding.
EXPLORATION RESULTS
In 2021, exploration activities were carried out at 97 licensed properties. In total, 325 km (excluding JVs) of drilling was completed, 1.5 times more than in 2020. 45 new licenses for geological studies, exploration and production of gold, silver, PGMs, copper and base metals were obtained. The total number of licenses owned by the Company was 172, the total licensed area - 12,200 km2.
Kyzyl
-- In 2021, exploration drilling was carried out at East Bakyrchik to confirm the prospects for expandingthe open pit and increase of the mineral resource base for the open pit mining. Exploration drilling of 3.5 km wascompleted. The contours of ore bodies and the boundaries of mineralization were refined.
-- In 2022, further exploration at Eastern Bakyrchik sites is planned to convert open-pit Mineral Resourcesinto the Indicated category. Additionally, Polymetal is planning exploration drilling to prospect the eastern flankof the Kyzyl shear zone, including the Sarbas and Karmen deposits. Also, deeper levels of the ore body 1 will betraced to increase Inferred resources.
Albazino hub
-- At Albazino, in 2021, exploration activities included exploration drilling (10.6 km) along the flanks anddelineation of the ore body at the southern flank of the Olga open pit. Additional Mineral Resources increased by342 Koz to 2.2 Moz with an average grade of 4.2 g/t.
-- In 2022, small-scale drilling is planned at Albazino on the northeastern extension of the Anfisa andNadezhda zones and on Olga's southern flank.
-- Exploration activities were completed at the Talgiy section of the Urkachik area (38.9 km of drilling). Acomplex of engineering-hydrogeological and oriented geomechanical drilling was carried out; metallurgical studiesare nearing completion. On the flanks, exploration activities were carried out to delineate and trace ore bodiesdown dip. The Mineral Resource estimate is 1.1 Moz of gold with an average grade of 3 g/t - an increase by 576 Kozin 2021. The initial Ore Reserve estimate is scheduled for 2022.
-- At Kutyn, 28.5 km of exploration drilling and 30,900 m3 of trenches were completed. Most of theexploration work was focused on upgrading Mineral Resources categories for mine planning. Besides, the deephorizons of the primary ore body were assessed with the use of exploration drilling on a wide-spaced grid. Areas ofprimary ore development with ore sections suitable for underground mining have been established. Ore Reservesincreased by 40% (or 325 Koz) to 1.1 Moz of gold with an average grade of 2.9 g/t. Additional MR totaled 414 Koz ofgold with an average of 5.1 g/t.
-- In 2022, the Company will continue to delineate free-milling ore on the flanks of the Kutyn deposit,explore deep horizons of primary ores, search and evaluate new ore bodies within the areas of promising geochemicaland geophysical anomalies. Detailed drilling will be performed within the later stages of the proposed open pitarea to convert Mineral Resources into Ore Reserves.
-- In 2022, the Company also plans to continue lithochemical prospecting within the lower Amur region andfurther study the identified geochemical anomalies by drilling with small-sized equipment.
Omolon hub
-- At Burgali, 12.3 km of exploratory drilling was completed along the existing ore bodies of the Northernzone and at the Southern and Central zones to identify and trace the prospective ore bodies. The initial OreReserve estimate amounted to 231 Koz of gold equivalent with an average grade of 9.8 g/t, up by 110 Koz compared tothe last year's estimate.
-- In 2022, Polymetal is planning to continue exploration activities at all ore zones of the deposit todelineate and detail ore bodies within the first stage of open-pit mining and identify new ore bodies to increasethe mineral resource base.
-- Initial Ore Reserves estimate for Nevenrekan was completed amounting to 170 Koz of GE with an averagegrade of 10.2 g/t
-- At the Tumaninsk area (145 km north of Kubaka), 14.4 km of core drilling was completed, including 3.3 kmof exploration drilling at the Shlikhovoy site.
-- In 2022, the drilling is planned at the Tumannoye ore occurrence to delineate high-grade underground oreon the southern flank and to prepare a Russian standard (GKZ) reserve estimate. At the Shlikhovoy site, it isplanned to trace and delineate the identified potential ore bodies along the strike and down dip by core drillingand to clarify their parameters and morphology.
Varvara hub
-- In 2021, at Elevator, 8.1 km of drilling was completed (40 drill holes). The goal was to explore andcreate a detailed section in the center of the deposit to upgrade Mineral Resource categories and convert them intoOre Reserves, as well as delineate the ore body of the deposit in a western direction. Elevator's initial OreReserve estimate comprises 421 Koz of gold with an average grade of 1.2 g/t. Additional Mineral Resources amountedto 240 Koz of gold with an average grade of 1.6 g/t.
-- At Komar, Ore Reserves increased by 173 Koz to 1.2 Moz of gold equivalent with an average grade of 1.6 g/t due to open pit boundaries extension.
-- In 2022, Polymetal plans to perform mud drilling to complete the study of the geochemical anomalies inthe South-Elevator area.
Dukat hub
-- During the reporting year, exploration activities were focused at the Doroninskaya area. 14.5 km ofdrilling and 20,800 m3 of trenches were completed.
-- In 2022, it is planned to complete delineation and detailing of the ore bodies in zone 1, conducttechnological studies and prepare GKZ-compliant ore reserve estimate.
-- At Dukat, additional exploration of the flanks of ore bodies from underground and surface was carried outto identify new areas of the existing ore bodies with material content of metals and new ore bodies near theexisting mining operation. Within the Dukat ore cluster, Polymetal started to verify the results of airbornegeophysical survey in order to identify a "blind" ore body. 5 drill holes with a total length of 4.3 km werecompleted.
-- In 2022, Polymetal plans to continue exploration activities and drilling to verify geophysical andgeochemical anomalies within the Dukat ore cluster.
Svetloye
-- In 2021, exploration activities were carried out at the Svetloye deposit on the flanks of the Lyudmilaand Emmy ore zones using surface mining and drilling. 26.4 km of core drill holes and 55,000 m3 of trenches werecompleted. The 2021 exploration campaign allowed to identify number of mineralization interceptions along the newand previously identified ore bodies on the northern, northeastern and southern flanks of the Emi zone and on thenorthwestern flanks of the Lyudmila zone. The exploration potential of previously less studied mineralized areaswas confirmed. The increase in Ore Reserves based on the results of the exploration campaign (57 Koz of gold)partially compensated for production in 2021. Additional Mineral Resources increased by 45 Koz to 182 Koz.
-- In 2022, it is planned to continue exploration activities on the flanks of the deposit to identify newpromising mineralization zones and determine new areas of mineralization. Areal geochemical exploration willfurther study the flanks of the deposit with undelineated gold anomalies.
-- In 2021, exploration activities were carried out at the Kulyukli site (1.2 km of drilling and 13,000 m3of trenches were completed). Ore intersections were identified along the trenches in the Vostochnaya andPerevalnaya zones, which assume a preliminary forecast estimate of 30-60 Koz of gold.
Voro hub
-- At Pavlov, Polymetal conducted core drilling to delineate the identified mineralization along the strikeand down dip. 116 drill holes with total length of 14.9 km were carried out. The initial JORC-compliant MineralResource estimate was completed and amounted to 727 Koz of gold at an average grade of 2.3 g/t.
-- In 2022, the Company will continue exploration to prepare an updated Mineral Resource and initial OreReserve estimates in 2023.
-- At Andrei deposit, the exploration was focused on gold mineralized areas, a total of 5.8 km of coredrilling was completed. The initial Mineral Resource estimate amounted to 174 Koz of gold with an average grade of2.3 g/t.
-- In 2022, Polymetal will continue exploration at the entire license area and expects to complete statutoryore reserve approval (GKZ).
Mayskoye
-- At Mayskoye, Ore Reserves and Mineral Resources were revaluated assuming changes in cut-off grade andbetter recovery rate. Ore Reserves increased by 103 Koz to 1.9 Moz with an average grade of 7.4 g/t; additionalMineral Resources added 382 Koz to reach 3.2 Moz with an average grade of 9.3 g/t.
-- No exploration is expected in 2022.
Nezhda
-- In 2021, most of the exploration was carried out at the southern flank of the deposit. 9.5 km of coredrilling and 40,000 m3 of tranches were completed. The results confirmed further potential of Mineral Resourceextension.
-- Ore Reserves increased by 734 Koz (mainly underground) to 5.1 Moz of GE with an average grade of 3.4 g/t.Additional Mineral Resources were up by 500 Koz to 8.6 Moz GE with an average grade of 4.8 g/t.
-- In 2022, drilling will continue at the flanks to assess ore bodies with open-pit resources extensionpotential.
Prognoz
-- In 2021, 14.3 km of infill drilling was completed. The potential increase in reserves was offset by theOre Reserve revaluation based on processing at Nezhda.
-- Prospecting works were carried out at the promising Atyr-Moginsk and Uzlovaya areas. The lithochemicalsamples analysis is in progress.
-- In 2022, Polymetal will continue infill drilling at Glavnaya area to prepare it for mining, as well asexploration works at Atyr-Moginsk and Uzlovaya areas.
Veduga
-- In 2021, Polymetal conducted exploration drilling at deep horizons of the Ore Body 1 to evaluate themineralization potential down dip, and at Strelka section to trace the ore bodies along the strike and down dip.Total drilling volumes amounted to 10.6 km. The Company was also developing the exploration decline to study theOre Body 1 to the horizon of -110 m and prepare it for mining. The updated Ore Reserve estimate recorded anincrease of 1,3 Moz to 4 Moz of gold with an average grade of 3.9 g/t.
-- In 2022, Polymetal will continue to evaluate resources of the Ore Body 1 at the deep horizons. 8 km ofdrilling is planned. It is also expected to complete the development of the exploration decline to the level of +0m, exploration galleries, as well as to conduct underground exploration and carry out exploration at some newpromising areas. The Company expects to complete an updated Ore Reserve estimate.
PGMs
-- Viksha
The Russian standard (GKZ) feasibility study and reserves were approved.
-- Kuolisma (Karelia)
In 2021, 1.7 km of drill holes was completed. In 2022, the Company plans to approve Russia statutory reserves (GKZ).
-- Kaalamo (Karelia)
Two mineralization areas with high contents of PGMs contained in sulphidized hornblendites were identified as a result of 9.2 km of drilling. In 2022, Polymetal plans to further evaluate their viability.
JUNIOR JOINT VENTURES
Novopet, JV with Rosgeo (Republic of Bashkortostan, share of Polymetal - 75%)
-- In 2021, 71 drill holes with a total length of 40 km were completed. Subhorizontal ore body was studiedat the depth of 350-450 m, the exploration grid and initial JORC-compliant Mineral Resource estimate werecompleted. Mineral Resources amounted to 2.4 Moz of GE at an average grade of 8.0 g/t.
-- In 2022, 12 km of drilling is planned. Updated Mineral Resource estimate and initial Ore Reserve estimateare expected in 2023.
Taimyr JV (Taimyr Peninsula, Krasnoyarsk region, share of Polymetal - 70%)
-- In 2021, the Company carried out 3.5 km of core drilling, geophysical and geochemical works. Two coppermineralization areas as well as several promising anomalies of copper and gold were identified.
-- In 2022, JV will continue exploration at the identified mineralization and promising geochemicalanomalies.
Pekinskaya (Taimyr Peninsula, Krasnoyarsk region, share of Polymetal - 63%)
-- During 2021, the JV completed 4.8 km of core drilling at the "First" section as well as carried outgeophysical and geochemical works. Several molybdenum-copper anomalies were established within Dorozhin orecluster. Copper geochemical anomalies evaluation is in progress.
-- In 2022, drilling and detailed exploration will take place at "First" and "North" sections with the aimto discover porphyry-copper-molybdenum and epithermal silver-gold ores.
Matenvunay (Chukotka), JV with MEN (share of Polymetal - 25%)
-- In 2021, the annual exploration plan was not completed due to logistic challenges and unsatisfactorystate of a contractor's drilling equipment. Four drill holes with a total length of 801 m and 8,700 m3 of trencheswere completed.
-- In 2022, the Company is going to complete 2021 plans.
Please find the full PDF version of the announcement at the link at the bottom of the page.
About Polymetal
Polymetal International plc (together with its subsidiaries - "Polymetal", the "Company", or the "Group") is a top-10 global gold and silver producer with assets in Russia and Kazakhstan. The Company combines strong growth with a robust dividend yield.
Enquiries
Media Investor Relations
Polymetal ir@polymetalinternational.com
FTI Consulting
Evgeny Monakhov +44 20 7887 1475 (UK)
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Timofey Kulakov
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Joint Corporate Brokers
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Panmure Gordon Jamil Miah
John Prior
+44 20 7886 2500
Rupert Dearden
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[1]) GE includes gold and silver only here and further in the report unless otherwise stated. Base metals are excluded due to their immateriality.
[2]) Reserves additions from revaluation and initial estimates / reserve depletion.
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Attachment File: Polymetal: Ore Reserves, Mineral Resources and Exploration update as at 1 January 2022
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